FiberWeek_2010_An Overview of Fiber to the Home Deployment - Status & Trends
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This document provides an overview of fiber to the home (FTTH) deployment globally and in Europe. It discusses the key drivers for FTTH including higher bandwidth capabilities and future-proofing networks. It outlines some of the economic challenges for FTTH rollout related to investment costs and user adoption rates. Regulatory challenges around infrastructure sharing and access obligations are also examined. New business models for separating infrastructure and services are presented as a potential solution. The document concludes that while FTTH is the ultimate broadband solution, governments will need to play a role through policies supporting deployment in rural areas due to market failures.
FiberWeek_2010_An Overview of Fiber to the Home Deployment - Status & Trends
- 1. An Overview of Fiber to the Home Deployment - Status & Trends FiberWeek 2010, Croatia Dr. Igor Brusic SBR Juconomy Consulting AG Split, 29.04.2010 1
- 2. 1 Why Fiber to the Home? 2 FTTH Deployment Worldwide / Europe 3 Economic Challenges 4 Regulatory Challenges 5 New Business Models 6 Summary and Outlook 2
- 3. Introduction - SBR SBR Juconomy Consulting AG offers sound business, technical, regulatory and legal advice on regulated markets in the telecoms sector and other network industries (post, electricity, gas, railways), as well as the media and information technology (ICT) segments Established on 1 March 2004 Track record of >100 projects in the telecommunication sector Consulting of utility service providers regarding the cooperation potential for fibre- based network roll-outs and regulatory questions concerning the use of different access technologies Ongoing support to municipalities and utility providers with regard to building their own broadband network infrastructure and the migration from unbundling local-loop to an FTTX strategy 3
- 4. Why Fibre to the Home (FTTH)? Source: http://www.useit.com/alertbox/980405.html 4
- 5. Why Fibre to the Home (FTTH)? Source: A.T. Kearney/Hellenic Ministry of Transport&Communications/Broadband Strategy/May 2008 5
- 6. Why Fibre to the Home (FTTH)? Source: McKinsey&Company, Creating a Fiber Future, White Paper, 2010 6
- 7. Why Fibre to the Home (FTTH)? Source: OECD adapted from “Electricity and Economic Growth”, Committee on Electricity in Economic Growth, Energy Engineering Board, National Research Council (1986). 7
- 8. Why Fibre to the Home (FTTH)? Source: Based on Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, Carlota Perez; IBM 2004 Annual Report 8
- 9. Why Fibre to the Home (FTTH)? The choice is yours … 9
- 10. 1 1 Why Fiber to the Home? Why Fiber to the Home? 2 FTTH Deployment Worldwide / Europe 3 3 Economic Challenges Economic Challenges 4 4 Regulatory Challenges Regulatory Challenges 5 5 New Business Models New Business Models 6 6 Summary and Outlook Summary and Outlook 10
- 11. FTTH Global 2009 Source: FTTH Council Europe 11
- 12. Countries (> 1% of FTTH) 12
- 13. USA 13
- 14. Asia 14
- 15. Australia 15
- 16. Europe 16
- 17. Europe / Countries 17
- 18. 1 1 Why Fiber to the Home? Why Fiber to the Home? 2 2 FTTH Deployment Worldwide // Europe FTTH Deployment Worldwide Europe 3 Economic Challenges 4 4 Regulatory Challenges Regulatory Challenges 5 5 New Business Models New Business Models 6 6 Summary and Outlook Summary and Outlook 18
- 19. Economical challenges Very strong dependency How much has to be invested? on revenue and number of users How much the user is ready to pay? Fixed costs and variable costs Highest investments costs in access network infra- structure because of civil work (50-80%) Operators are investing if: Business model is How many users will pay for it? positive, or Strategic decision Source: Dr. Raul Katz: Ultrabroadband telco investment models; Ultra Broadband Seminar, Paris, April 2008 19
- 20. 1 1 Why Fiber to the Home? Why Fiber to the Home? 2 2 FTTH Deployment Worldwide // Europe FTTH Deployment Worldwide Europe 3 3 Economic Challenges Economic Challenges 4 Regulatory Challenges 5 5 New Business Models New Business Models 6 6 Summary and Outlook Summary and Outlook 20
- 21. Regulatory challenges If the fiber network is built by the incumbent, without regulatory holidays, probably it has to be open for use by alternative operators Symmetrical or asymmetrical regulation? Ex-ante or ex-post obligations/remedies? Focus on infrastructure or service competition? Higher return on capital invest because of higher risk? Defining network elements, for which SMP is relevant and to which access is to be granted (ducts, dark fiber, collocation) 21
- 22. Possible solution Hurdles Consequences Solution Market uncertainty Private sector will Harmonizing of investment Harmonizing of investment probably hold back incentives and operator‘s incentives and operator‘s Regulatory uncertainty with investments in strategies through strategies through • Regulatory holidays – PPP-Projects fiber if pay back is not – PPP-Projects • SMP analysis ensured under given – – Open Access Models Open Access Models market and regulatory – – Obligation to provide Obligation to provide conditions wholesale-offers wholesale-offers Fostering of investment 22
- 23. 1 Why Fiber to the Home? Why Fiber to the Home? 2 FTTH Deployment Worldwide // Europe FTTH Deployment Worldwide Europe 3 Economic Challenges Economic Challenges 4 Regulatory Challenges Regulatory Challenges 5 New Business Models 6 6 Summary and Outlook Summary and Outlook 23
- 24. New business models Passive Infrastructure Active Infrastructure Services AB Stokab Dark Fiber Provider 1 many plenty ndix Digital Marketplace Provider 1 plenty Singapore and NetCo OpCo Retail Service Provider Australia Provider 1 1 plenty Schwerte and Verticaly integrated operator M-net Provider 1 24
- 25. 1 1 Why Fiber to the Home? Why Fiber to the Home? 2 2 FTTH Deployment Worldwide // Europe FTTH Deployment Worldwide Europe 3 3 Economic Challenges Economic Challenges 4 4 Regulatory Challenges Regulatory Challenges 5 5 New Business Modells New Business Modells 6 Summary and Outlook 25
- 26. Summary Fiber as the new infrastructure Difficult business model for operators Private sector can´t capture social benefits and economical impact (externalities like rising employment, higher tax income, reduced outflow of people, business settlement, CO2 reduction, etc.) Governmental support can be essential (Sweden) Rural areas are in a unfavorable position (World) Regulation matters but regulatory holiday can´t save rural areas (USA) Fiber is squeezing out xDSL (Japan) Municipality networks and open access as a possible solution (Europe) There is no „one-fits-all“ approach in deploying fibre 26
- 27. Outlook Fibre is the ultimate solution of the broadband challenge Mobile networks (LTE, WiMAX) are not competing but promoting the acceptance of FTTH Infrastructure competition is not a way to count on fostering national fibre roll-out Governments have to play a bigger role by Promoting e-government, telemedicine, telework and online learning Favorable tax policies Investing/funding fiber roll-outs in rural areas But this is not (yet) part of the Croatian government economy recovery program (http://www.slideshare.net/manjgura/program-gospodarskog-oporavka) 27
- 28. Contact SBR Juconomy Consulting AG Nordstrasse 116 Parkring 10/1/10 40477 Düsseldorf 1010 Wien Deutschland Österreich Tel: + 49 211 68 78 88 0 Tel: + 43 1 513 514 0 15 Fax: + 43 1 513 514 0 95 Fax: + 49 211 68 78 88 33 URL: www.sbr-net.com URL: www.sbr-net.com E-mail: brusic@sbr-net.com 28
- 29. Main incentive for FTTH for Iliad Source: Iliad, FY 2008 Results and Strategy Presentation, March 19th 2009 29